EPA issues scrubber mandates for several coal units in Texas

The U.S. Environmental Protection Agency (EPA) will publish in the Jan. 5 Federal Register its final decision to partially approve and partially disapprove a revision to the Texas State Implementation Plan (SIP) submitted in March 2009 to address the regional haze requirements of the Clean Air Act (CAA).

The EPA is partially approving this SIP revision as meeting certain requirements of the regional haze program, including the Best Available Retrofit Technology (BART) requirements for facilities other than Electric Generating Units (EGUs). The EPA is partially disapproving the Texas SIP revision for not adequately addressing other requirements of the regional haze program related to reasonable progress, the long-term strategy, and the calculation of natural visibility conditions. The EPA is promulgating a Federal Implementation Plan (FIP), which includes sulfur dioxide (SO2) emission limits for fifteen EGUs located at eight coal-fired power plants, to address these deficiencies.

In a previous rulemaking, the EPA had issued a limited disapproval of the Texas regional haze SIP with regard to Texas’ reliance on the Clean Air Interstate Rule (CAIR), without promulgating a FIP. The EPA is not taking final action to address this deficiency at this time.

The EPA is also disapproving portions of several separate infrastructure SIP revisions submitted by Texas for the purpose of addressing the requirements of the Clean Air Act regarding interference with other states’ programs for visibility protection (interstate visibility transport) triggered by the issuance of the 1997 fine particulate matter (PM2.5) National Ambient Air Quality Standards (NAAQS), the 1997 ozone NAAQS, the 2006 PM2.5 NAAQS, the 2008 ozone NAAQS, the 2010 Nitrogen Dioxide (NO2) NAAQS, and the 2010 SO2 NAAQS. The EPA is deferring action at this time on promulgating a FIP to address these deficiencies.

Finally, the EPA is finalizing its proposed partial disapproval of a revision to the Oklahoma SIP submitted in February 2010 to address the regional haze requirements of the CAA. Specifically, the EPA is disapproving portions of the Oklahoma SIP related to reasonable progress and the establishment of reasonable progress goals for the Class I area located within the state. The EPA is promulgating a FIP to address these deficiencies.

This final rule is effectice 30 days from publication in the Jan. 5 Federal Register.

The final SO2 emissions limit (lbs/MMBtu) for Texas units with mandated scrubber upgrade are:

  • Sandow Unit 4 (Luminant), 0.20;
  • Martin Lake Unit 1 (Luminant), 0.12;
  • Martin Lake Unit 2 (Luminant), 0.12;
  • Martin Lake Unit 3 (Luminant), 0.11:
  • Monticello Unit 3 (Luminant), 0.06;
  • Limestone Unit 2 (NRG Energy), 0.08;
  • Limestone Unit 1 (NRG Energy), 0.08; and
  • San Miguel (San Miguel Electric Cooperative), 0.60;

The SO2 limits for plants/unit subject to scrubber retrofits are:

  • Big Brown Unit 1 (Luminant), 0.04;
  • Big Brown Unit 2 (Luminant), 0.04;
  • Monticello Unit 1 (Luminant), 0.04;
  • Monticello Unit 2 (Luminant), 0.04;
  • Coleto Creek Unit 1 (GDF Suez), 0.04;
  • Tolk Unit 172B, 0.06 (Xcel Energy); and
  • Tolk Unit 171B (Xcel Energy), 0.06.

EPA does not anticipate that San Miguel Electric Cooperative will have to install any additional control in order to comply with this emission limit. It said it believes there is spare capacity available within the plant’s current scrubber system.

The agency found that five years is an adequate amount of time to allow for the installation of scrubber retrofits, and three years is an adequate amount of time to allow for the installation of scrubber upgrades. It also found that one year is enough time for compliance for San Miguel. It is therefore finalizing: five years from the effective date of this final rule for Big Brown Units 1 and 2, Monticello Units 1 and 2, Coleto Creek Unit 1, and Tolk Units 171B and 172B; three years from the effective date for Sandow 4, Martin Lake Units 1, 2, and 3, Monticello Unit 3, and Limestone Units 1 and 2; and one year from the effective date for San Miguel.

EPA responds to myriad comments on this plan

The Jan. 5 notice will address a number of comments made on the proposed version of the rule by a number of parties, including environmental groups and industry organizations.

For example, Xcel Energy tried to argue that any scrubbing at Tolk is impracticaly because of scarce local water supplies. "We conclude that Xcel’s asserted water requirements for dry scrubbing are much higher than other similar dry scrubbing installations, and the basis for the disparity is unsupported," said EPA. "As confirmed by our communications with the High Plains Water District and Xcel, we also conclude that Xcel has multiple lines of access to adequate supplies of water sufficient to supply the proposed dry scrubbers (SDA) without the need to buy additional water rights."

Xcel also alleged that EPA’s cost analysis failed to consider that the proposed dry scrubbers would (1) end Tolk’s sales of its fly ash or require the installation of additional baghouse capacity, and (2) require additional landfill capacity. Xcel also alleged that EPA did not adequately consider dry sorbent injection (DSI) and non-air environmental impacts, and that the assumption of a 30- year operating life is wrong. "Our cost analysis did include an additional baghouse that could be installed upstream of the dry scrubber which can preserve Tolk’s existing fly ash sales," said the agency. "Also, our cost analysis included landfill costs, which based on Xcel’s own information, are adequate to cover the additional disposal costs. We also believe our DSI cost methodology, in which we bounded the range of expected DSI performance, was adequate and demonstrated that DSI was not cost-effective when compared to the dry scrubber we costed for Tolk."

An unnamed commenter said that SO2 emissions from the Luminant coal units have been trending down in recent years, making these new controls unneeded. "The annual and quarterly SO2 emissions data for Luminant’s facilities for 2009-2015 demonstrate that, although there has been an overall downward trend in annual SO2 emissions during this time period, there has not been a downward trend in SO2 emissions during Quarter 3 for the six-year period for which full data are available," said EPA. "Except for the years 2011 and 2012, when total SO2 emissions for Quarter 3 were either sizably higher or lower compared to the other years during the 2009-2014 time period, emissions for Quarter 3 remained relatively unchanged during this six year period. This is significant because Quarter 3 corresponds to the summer months and many of the 20% worst days, which is what the reasonable progress goals are based on, typically occur during the summer months. Emissions reductions during the fall and/or winter months reduce annual emissions, but will not lead to improved visibility during the 20% worst days. The majority of the decline in total annual SO2 emissions from the Luminant sources is driven by seasonal operation of Monticello units 1 and 2. Furthermore, as we discuss in more detail elsewhere, we do not anticipate any significant reductions at these sources in the near future, and information provided by Texas indicates it agrees."

One complaint was that EPA is not taking into account how emissions from power plants and other sources in Mexico are impacting regional haze conditions in Texas. EPA said it agrees that Carbon I and Carbon II are responsible for significant levels of pollution. Carbon I is a 1,200 MW power plant and Carbon II is a 1,400 MW coal-fired power plant. These two power plants, less than 1.5 miles apart, are less than 20 miles from the U.S.-Mexico border. Together, these power plants comprise one of the largest uncontrolled sources of SO2 and NOX in North America. It has been demonstrated for some time that they are significant contributors to visibility impairment in a part of Texas.

"However, addressing international emissions can be complex," EPA noted. "For instance, Texas has recently issued water discharge and mining permits to a coal mine in Maverick County, near the Texas border town of Eagle Pass, to allow the Mexican company Dos Republicas to begin mining coal that will reportedly be sent to these facilities. Prior to our delegation of the National Discharge Elimination System (NPDES) permitting authority to Texas, we issued a NPDES permit for the operation of this mine, and in the process issued an Environmental Impact Statement (EIS). In our EIS, we stated that ‘…EPA does not have the authority to prohibit export of U.S. resources which will cause the country environmental harm…EPA believes that the U.S. policy should be to take actions which will generate the investment capital needed to directly solve the Carbon I/II problem.’ Subsequent to that, we attempted to work with the government of Mexico specifically on the problem of installing controls on these sources through a technical work group composed of EPA and SEMARNAP (now SEMARNAT, the Mexican Environment and Natural Resources Secretariat) staff. Unfortunately, these discussions did not result in any control of Carbon I and II. However, EPA is committed to explore opportunities for further discussions with Mexico concerning this subject."

EPA rejects arguments about grid reliability impacts

The Texas Commission on Environmental Quality (TCEQ) recommended that EPA withdraw the proposed FIP; however, if it did finalize the FIP, it believed EPA should include an electric reliability safety valve provision in the final rule. The TCEQ stated that the federal agency had not evaluated any potential impacts of the proposed FIP to reliability and prices of electricity in Texas. It included a 2014 Electric Reliability Council of Texas (ERCOT) study of the impacts that environmental regulations have in the ERCOT Region.

Said EPA in response to the TCEQ comments on electric reliability: "First, we note that controls achieving the level of control that we are requiring are highly cost-effective, are in wide use in the industry, and thus should not require a source to shut down to comply. In response to the TCEQ’s comments, however, we contracted with Synapse Energy Economics, Inc., a nationally recognized firm with particular expertise in the subject area. Synapse assessed the information in the ERCOT report and we reproduce its findings below":

  • ERCOT’s perspective of market operations is short‐sighted. ERCOT raises concerns that reliability could be impacted if numerous coal units choose to retire simultaneously with little notice to either ERCOT or other market participants. Unlike other competitive market regions, ERCOT’s rules do not require meaningful notice. ERCOT’s charge as a reliability coordinator may obligate it to implement rules requiring reasonable notice for economic retirements.
  • ERCOT’s assumptions about new gas turbine capacity are not realistic. While the FIP, along with other environmental regulations ERCOT included in its study, will strain the economic viability of coal plants and likely lead to less coal capacity, ERCOT has not considered new resources that will be available to help address potential reliability challenges. Specifically, ERCOT does not include approximately 4,500 MW of additional gas‐fired capacity coming online in Texas in the upcoming years. This represents 7.5% of current gas capacity, and would double the modeled baseline gas capacity additions through 2029.
  • The set of regulatory scenarios modeled is both incomplete and (now) outdated. Despite an overall thorough analysis ERCOT excluded a critical scenario that would have modeled the impact of the Regional Haze Program FIP by itself. This limits inferences EPA can make about impacts. Additionally, since ERCOT finalized its study, EPA  finalized the Clean Power Plan. The final rule includes substantive changes that are likely to affect all of the CO2 limit and price-inclusive scenario modeling results.
  • Electric Generating Unit owners’ compliance “burdens” with the regional haze FIP may be over‐stated. Of the 15 coal‐fired units subject to regional haze compliance requirements, eight require upgrades to their existing scrubbers rather than new scrubbers. ERCOT assumed that all of the scrubbers would be priced at the cost of a new retrofit, thereby substantially increasing the cost of the regulation.

"We reviewed and accept our contractor’s finding and adopt its conclusion that ERCOT’s report contained significant flaws," said EPA. "In sum, ERCOT’s report cannot support a determination that there is likely to be any significant, adverse effect on the supply, distribution, or use of energy. During our comment period, we received no non-speculative information to validate claims that sources would retire rather than install demonstrably cost-effective controls. Commenters who have alleged grid reliability concerns in response to our proposed controls have not provided adequate documentation for their assertions."

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.